D PUDUMJEE AND CO Vs. NHMOOS

JUDGEMENT

(1.) This is an appeal from a judgment and order of Mr. Justice Kemp, dated March 27, 1925. The material facts are these : On February 9, 1922, the respondent, who is the receiver in High Court Suit No. 688 of 1917, lent and advanced to F. F. Gordon, Ltd., the sum of Rs. 2,00,000, under circumstances more fully stated hereafter. An order for winding up the said company Was made on September 1, 1922, and an official liquidator was appointed. On January 17, 1923, the receiver claimed to be ranked as a secured creditor for the said sum of Rs. 2,00,000. The claim was investigated by the liquidator on March 29, 1928, and he was of opinion that it was a just one; he, therefore, " allowed the same as a preferential claim subject to the sanction of the Court, to the extent of moveables " on the ground that the receiver was a pledgee in possession. On April 7, the liquidator applied for directions, and Mr. Justice Kemp, after hearing counsel for the petitioning creditors, made an order in these terms :-"The receiver to rank as a secured creditor in respect of the security for the amount of his principal debt and interest." The petitioning creditors now bring this appeal.

(2.) F. F. Gordon, Ltd. , was a private company registered under the Indian Companies Act, 1913, on March 3, 1916. Its issued capital was Rs. 2,00,200, consisting of 2002 fully paid up share- of the nominal value of Rs. 100 each. Two thousand shares were held by Mr. F. F. Gordon, and the remaining two by Mr. H. P. Byramjee. The main object of the company was to carry on the business of newspaper proprietors, and of newspaper and general printers and publishers, advertisers, and advertising agents and contractors, and to acquire and take over as a going concern the business of newspaper proprietors and printers then carried on by F. F. Gordon and Co, at the Advocate of India Printing Press in Bombay. Under the articles of the company Mr. Gordon was its first governing director In 1917, he left India and never returned. On September 9, 1920, Mr. Gordon executed a power of-attorney (Exh B) in favour of Mr. James Cunningham to act for him as " managing director" of the company and as editor of the Advocate of India, and in connection therewith to do " all things which may be necessary to manage the business."

(3.) The company found itself in need of money. On February 6, 1922, Cunningham as the managing director wrote a letter (Ex, C) to the said receiver intimating that they were prepared to mortgage to him the plant, machinery, goodwill of the concern and the building lease as security against the loan of Rs. 21/2 lacs which was being negotiated.